HWG LLP Advisory
By: Julie A. Veach, Deepika H. Ravi, and Daeyeong Kim
On July 29, 2024, the Federal Communications Commission (“FCC” or “Commission”) released a new Report and Order and Further Notice of Proposed Rulemaking (“Report and Order” or “FNPRM,” as appropriate) that expands the E-Rate program, a universal service support mechanism that delivers affordable telecommunications to schools and libraries. Specifically, the Report and Order adopts new rules that (i) permit schools and libraries to receive support for Wi-Fi hotspots and mobile wireless Internet services for off-premises use by students, school staff, and library patrons and (ii) establish safeguards for E-Rate funding. The FNPRM seeks further comment on additional steps to improve the efficient use of limited E-Rate funding. Wi-Fi hotspots and mobile wireless Internet services will be eligible for E-Rate funding beginning in the 2025 funding year.
Expanded E-Rate support for Wi-Fi hotspots and mobile wireless Internet services used off-premises. In recognition of the increasing prevalence of digital learning, particularly since the COVID-19 pandemic, the FCC’s new rules will allow schools and libraries to receive E-Rate support for Wi-Fi hotspots and mobile wireless Internet services that are used off-premises. The Report and Order defines eligible equipment and services, establishes a budget mechanism and support limits, and implements safeguards to ensure the judicious use of program funding.
Eligible equipment and services. The new rules define “Wi-Fi hotspot” as a “device that is capable of receiving advanced telecommunications and information services, and sharing such services with another connected device through the use of Wi-Fi.”1 The Report and Order further explains that the device must be a portable single device whose “sole function” is to provide Wi-Fi connectivity through mobile wireless Internet services.2 The final rules exclude from E-Rate eligibility multi-functional devices such as smartphones, PCs, routers, switches, wireless access points,3 and other off-premises technologies such as private 5G/LTE networks and fiber.4 Similar to the Emergency Connectivity Fund program, E-Rate support is limited to one Wi-Fi hotspot device per student, staff member, or library patron.5 The Commission declined to adopt minimum service standards.6
Budget mechanism establishing support limits. The Report and Order establishes a pre-discount funding cap of $15 per month for recurring mobile wireless Internet services and a pre-discount funding cap of $90 per Wi-Fi hotspot.7 It also sets a three-year budget cycle for funding, and a formula to calculate a maximum budget for Wi-Fi hotspots and services based on student count or library size, a predetermined Wi-Fi hotspot ratio,8 the applicable discount rate, and the three-year cost of the funding caps.9 To prevent warehousing, the final rules prohibit applicants from requesting or using funding to purchase or reserve Wi-Fi hotspots, whether for future use or to replace stolen, lost, or broken devices.10 Lastly, if demand for E-Rate support exceeds available funds, the E-Rate program will prioritize eligible on-premises services before funding eligible off-premises use of Wi-Fi hotspots and services.11
Safeguards. The Report and Order also imposes several limits and requirements on program participants to reduce waste, fraud, and abuse of E-Rate funding:
- Acceptable Use Policy. Program participants must establish an acceptable use policy (“AUP”) that limits off-premises use of E-Rate-supported Wi-Fi hotspots to primarily educational purposes.12 While the Commission will require schools and libraries to provide notice regarding the AUP to students, school staff, and library patrons, it will not require program participants to collect signed documentation from end users.13
- Usage Requirements. Schools and libraries must activate Wi-Fi hotspots that receive E-Rate support, make them available for loan, and publicize the availability of such devices.14 The final rules also require program participants to maintain active use of the Wi-Fi hotspots. To prevent prolonged non-usage, the Commission directs service providers to provide regular usage reports to schools and libraries.15 Service providers must also (i) provide 30 days’ notice to cure non-usage after 60 consecutive days of non-usage and (ii) terminate service lines that remain unused after this period.16 If a line of service is terminated for non-usage, service providers cannot bill program participants for any balance not paid by the E-Rate program.17
- Recordkeeping Requirements. The final rules require program participants to maintain a detailed inventory of E-Rate-supported devices, including device model and other specifications and dates of the loan period.18 Schools and libraries must maintain records of inventories, AUPs, evidence of publicizing efforts, and other required documentation for a minimum of ten years “after the latter of the last day of the applicable funding year or the service delivery deadline for the funding request.”19
- Compliance With The Children’s Internet Protection Act (“CIPA”). The final rules also require program participants to comply with CIPA, which requires schools and libraries to establish safeguards such as blocking or filtering harmful content and monitoring online activities of minors.20
FNPRM on steps to improve the E-Rate program’s effectiveness. The Commission also seeks further comment on how to ensure the efficient and effective use of E-Rate funding in support of Wi-Fi hotspots and services that are used off-premises.21 Specifically, the Commission asks (i) whether there are specific steps to minimize non-usage (e.g., limiting lending periods or reducing the non-usage grace period)22 and (ii) whether it should adopt specific user access restrictions.23
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HWG LLP’s cross-disciplinary telecommunications practice advises clients on federal and state legislative and regulatory proceedings, company compliance, and related litigation matters. Please contact Julie A. Veach, Deepika H. Ravi, or Daeyeong Kim for more information.
This advisory is not intended to convey legal advice. It is circulated publicly as a convenience and does not reflect or create an attorney-client relationship.
1 To be codified at 47 C.F.R. § 54.500.
2 Addressing the Homework Gap through the E-Rate Program, Report and Order and Further Notice of Proposed Rulemaking, FCC 24-76, WC Docket No. 21-31, ¶ 24 (rel. July 29, 2024). See also id. ¶ 25 (explaining that mobile wireless Internet services are those services “that can be supported by and delivered with Wi-Fi hotspots provided to an individual user”).
3 Id. ¶ 24.
4 Id. ¶ 25.
5 Id. ¶ 26.
6 Id. ¶ 27.
7 Id. ¶ 33 (explaining further that the caps exclude taxes and state electronic waste fees but include “reasonable costs” (e.g., delivery fees, activation, and configuration costs)).
8 Id. ¶ 36 (adopting a ratio of 20 hotspots per 100 students for schools and 5.5 hotspots per 1000 square feet for libraries).
9 Id.
10 Id. ¶ 42.
11 Id. ¶ 45.
12 Id. ¶¶ 48, 51.
13 Id. ¶ 51.
14 Id. ¶ 55.
15 Id. ¶ 66.
16 Id. ¶ 57. The Commission acknowledged that non-use may occur for limited periods (e.g., summer break), but concluded that the 90-day period balances the “legitimate reasons for limited periods of non-use with [the] need to protect program integrity.” Id. ¶ 59.
17 Id. ¶ 62.
18 Id. ¶ 71.
19 Id. ¶ 72.
20 Id. ¶ 97.
21 Id. ¶ 103.
22 Id. ¶¶ 104-5.
23 Id. ¶ 108.